Yes, you can transfer a car title if it's not paid off, but the process is more complex and typically requires paying off the loan first. The main obstacle is that your lender holds the lien and the physical title certificate as collateral. You cannot sign over a clean title you don't legally possess.
The standard procedure involves contacting your lender to get the 10-day payoff amount, which is the exact sum needed to close the loan, including any interest accrued. Once you pay this amount, the lender will release the lien. They will then send the title, either directly to you or to your state's Department of Motor Vehicles (DMV), with the lien satisfied. Only then can you properly sign the title over to the new owner.
If a private buyer is involved, they will likely be hesitant to pay you without receiving the title immediately. One common, but risky, workaround is for the buyer to send the payment directly to your lender. The lender then releases the title to the buyer. This requires a high level of trust and coordination between all parties. Alternatively, using an escrow service can mitigate risk by holding the buyer's funds until the title is cleared and transferred.
Selling to a dealership is often simpler. They are accustomed to handling lien payoffs and will typically pay your lender directly and handle the paperwork for you, deducting the loan balance from your car's agreed-upon value.
| Step | Action | Key Consideration | Typical Timeline |
|---|
| 1 | Contact Lender | Request the official "10-day payoff quote." | 1-2 business days |
| 2 | Secure Buyer/Payment | Buyer payment must cover the payoff amount. | Varies |
| 3 | Pay Off Loan | Use buyer's payment or other funds. | 1-3 business days to process |
| 4 | Lien Release | Lender signs off on the title. | 7-14 days to receive title |
| 5 | Title Transfer | Submit documents to your local DMV. | Varies by state |
Attempting to transfer a title without satisfying the lien is illegal and constitutes fraud, as it misrepresents the ownership status of the vehicle. The safest path is always to clear the loan before the sale.
